SAIL to invest Rs 1.5 lkh-cr to up capacity to 50 mt by 2025

"SAIL has formulated its vision document. We intend to ramp up our capacity to 50 mtpa by 2025.

Last Updated: Sep 20, 2013, 21:40 PM IST

New Delhi: Close to achieving 24 million tonne capacity, state-owned steel major SAIL Friday unveiled plans to take it to 50 million tonnes by 2025, entailing Rs 1.5 lakh crore investment.

"SAIL has formulated its vision document. We intend to ramp up our capacity to 50 mtpa by 2025.

Our present hot metal capacity is 14 mtpa. This will go up to 24 mtpa with the completion of ongoing expansion and modernisation works (by next year)," SAIL Chairman C S Verma said here Friday.

"Parallely, we are taking many other modernisation and expansion programmes which will take our capacity to 50 mtpa. This requires capital outlay of approximately Rs 1.5 lakh crore," Verma added.

A Board-level committee has been looking at the proposal and the investments, which would be almost evenly funded through internal generation and debt.

"As on Friday, our networth is Rs 41,000 crore and going by a conservative debt-equity ratio, our borrowing power is Rs 82,000 crore. Friday our borrowing is Rs 21,000 crore and most of the expenditure on the ongoing expansions is over. So, we will be generating more networth," Verma said.
SAIL has the sufficient land to carry out the next phase of expansions. All other necessary infrastructure is also in place, he said.

The proposed capacity expansion to 50 mtpa is in line with the Prime Minister Manmohan Singh's vision of enhancing India's steel-making capacity to 300 mtpa by 2025, from 85 mtpa at present.

Asked whether the country would be able to achieve the ambitious 300 mtpa target in less than 12 years from now, Verma said: "If China can add its capacity to 800 mtpa, from 190 mtpa in 10 years, why can't India?"

Verma had earlier said that most of SAIL expansion would be carried out through brownfield projects in existing five steel mills, barring one proposed at Sindri, where the plan is to set up a 5.6 mtpa greenfield steel plant.

"We will start work on increasing capacity to 50 mtpa as soon as the current phase of expansions is over next year," he had said.

The potential of steel demand in the country is huge as per capita consumption, at 57 kg, lags far behind the world average of 214.7 kg and China's average of 459.8 kg.